Some Points on Taxes in the Mid-Year Budget

• Government imposes 35% tax on income earners above Ghs10,000. It therefore means if one earns Ghs13,000, the existing rate of 25% would apply to the Ghs10,000 but the Ghs3,000 would be taxed at 35%.  This now becomes the last tax band on the tax schedule.
• 10% tax is to be levied on vehicles placed in the ‘Luxury Category’ which is capacity of 3.0 litres and above. Levy will be paid on first registration and subsequently at annual renewal.
• NHIS & GET Fund would be levied separately. VAT therefore stays at 12.5% of the price of the sale/service item.  Both the Health Insurance Fund and the GETFund levies will however continue to be 2.5 percent each.
• Members of the minority in parliament and former Minster of Finance, Mr. Seth Tepker

  

  are of the view that VAT has indirectly been increased as the government seeks the opportunity to eventually increase the 2.5% NHIS which has currently be touted as unsustainable.  Tekper specially says in a tweet that Ghanaians should not rejoice yet.

• Another notable information is that government missed its half-year revenue projections by Ghs1.4 billion. Initial projections targeted Ghs18.8 billion but this was missed by 7.4%.  The new tax adjustments by the government in the mid-year budget review are expected to generate an estimated GH¢845m.  Government also intends to reduce expenditure by Ghs664 million to make up for Ghs1.4 million drop in revenue

VAT may go up from 17.5% to 21.5%

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